DHL Supply Chain Case Solution & Answer

DHL Supply Chain Case Solution

Part 1

Executive Summary

Deutsche Post DHL Group is the world’s leading logistics company. Due to its high efficiency in the supply chain; it has connected people and markets, and has become the first choice of the customers, employees and investors throughout the globe. The company is presented in more than 55 countries and territories, with more than 1400 warehouses and offices worldwide. The company consists of more than 146000 supply chain employees. Deutsche Post DHL is the first logistic company, which is putting its higher efforts in reducing the carbon dioxide emissions. During 2008, the company improved its carbon dioxide mitigation efficiency throughout its global operations by 30% in comparison to 2007. In the latest contract with the consumer electronic company (CEC); the company has to ship 32” and 42” LCD TV sets. DHL is working with CEC in order to configure the optimal supply chain that would fulfill the order of the company within the available budget. The company uses various modes of transportation in order to transport its goods, which include: air express, regular air, rail, road network and water. Moreover, the company has seven original design manufacture (ODMs) located in China and Taiwan. (OFFICIALS).

DHL is one of the leading logistic company, which is currently facing difficulties in choosing the mode of transportation, in order to transport LCD TVs from the point of production to the point of distribution. The degradation of the environment has led many governments and customers to pressure the businesses to make their operation more eco-friendly and to put more emphasis over the reduction of carbon dioxide emissions in transportation. The company is expecting that an increase in the supply chain budget might lead the company towards a reduction in carbon dioxide emissions.

An optimal supply chain model is derived using AMPL tool on the basis of the given data. The model comprises of an objective to minimize carbon emissions, 63 decision variable in form of Xij where each variable represents the units to be produced and shipped by each ODM through each mode of transportation, and several constraints including; budget, production, shipment etc. (See Exhibit 1). The only difference in the model for 3.3 billion budget is the budget constraint with replacing 3 billion to 3.3 billion.

The results show that the firm should rely heavily on water transport with its least carbon emissions and costs. Along with it, the firm should put efforts to increase its budget as a 10% increase in the budget could result in more than a half reduction in carbon emissions.

Along with the optimal supply chain heavily relied on water transport, the firm is suggested to invest in various carbon reducing community projects which will help he firm reduce carbon in the area it operates without changing its operations. The firm is also suggested to train and motivate its employees to reduce their individual carbon footprint through various means i.e. carpooling, paper bags etc. In this way DHL soon will be able to achieve its carbon emission reduction targets and avail future benefits along with avoiding risks attached with raising environmental security concerns………………………

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